DynaTrace, Expanding Within Compuware, Looks to Drive Growth for a Giant

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When a big tech company acquires a smaller one, there is some bloodletting to be expected—and the smaller company’s products often will get marginalized, if not axed completely. Not so for Waltham, MA-based dynaTrace Software, which is now part of Detroit software giant Compuware (NASDAQ: CPWR).

Since the $256 million acquisition last July, Compuware has been busy integrating dynaTrace’s software into its offerings to help businesses run their Web and mobile applications more efficiently. It’s a growing problem for retailers and other big businesses, who lose money every time an app runs slowly or a transaction gets hung up.

That’s according to John Van Siclen, the former CEO of dynaTrace and now general manager of Compuware’s application performance management business unit. Since November, Van Siclen has been running that unit, which also includes the company’s Gomez (acquired by Compuware in 2009) and Vantage (homegrown) product lines.

Application performance management is Compuware’s second biggest business unit, behind its traditional mainframe software business, and it is expected to become the company’s largest business within a couple of years, Van Siclen says. “It’s the growth driver,” he says. Meantime, the business unit commands a workforce of about 250 people in the Boston area.

The IT and business landscape has changed a lot since Van Siclen (see photo, left) came on as dynaTrace’s CEO in 2008. Back then, the tough part was evangelizing and explaining to companies why their IT departments would need to do things like transaction management and code-level diagnostics. The key to building the business, he says, was finding the people who needed such tools the most—the people directly responsible for applications, like software architects, performance specialists, and CTOs of e-commerce shops. “They had no visibility into how the apps really worked,” says Van Siclen. DynaTrace was able to get traction by “showing people what the difference was and finding out who cared,” he says.

Now, with the complexity of business applications skyrocketing, it’s a much easier sell. “CIOs are finally starting to pay attention,” he says. “I’ve had more meetings with them in the last six months than in the previous five years.” DynaTrace’s business was doubling annually in the couple of years before the acquisition—and has “exploded” now that it’s part of Compuware, he says.

Van Siclen, a four-time CEO, had some thoughts on how to manage the business now that he’s part of a big company instead of a scrappy startup. The first key point, he says, is focusing on the right things. “A wide river goes slow,” he says. “In a big company, often you have too many things to do, you have a lot of people. You want to force yourself through the gorge, that’s where you have power and speed.” (I took this to mean getting a big team to concentrate its energy on particular points of attack.)

The second key point, related to the first, is to align teams in the right way to tackle specific problems—whether it’s dominating in financial services or e-commerce, say, or attacking a competitor, or developing new technologies for emerging sectors such as mobile, he says.

And the third point is that “simplicity wins,” he says. “The plan has to be simple and straightforward, and you have to just go at it.”

It remains to be seen how Compuware will fare ultimately against other big competitors in IT performance, including IBM and Hewlett-Packard. But Van Siclen seems confident. “Compuware is tripling down,” he says. The goal now is to “focus along a few tracks and crush them.”